The Central Bank of Nigeria (CBN) recently issued two (2) policies that pertain to foreign exchange remittances – the Guidelines for the Operation of International Money Transfer Services in Nigeria (the IMTO Guidelines) and the circular on the Removal of Allowable Limit of Exchange Rate Quoted by the International Money Transfer Operators (the Allowable Limit Circular). These policies are aimed at addressing the issues of foreign exchange volatility.

9 February 24

Businesses with an International Money Transfer Operator (IMTO) licence are authorised by the CBN to facilitate the efficient transfer and remittance of funds from entities or individuals residing abroad to recipients in Nigeria. The IMTO Guidelines which were first issued in September 2014 (the Old IMTO Guidelines) regulates the licensing and operations of IMTOs in Nigeria. The recently issued Guidelines for IMTOs (the New IMTO Guidelines) revises the Old IMTO Guidelines and, among other things, outlines permissible activities, new organisational structure, and corporate governance standards for IMTOs.

Additionally, by the CBN’s Circular of 13 September 2023, IMTOs were required to quote an exchange rate for naira payouts to beneficiaries of diaspora remittances (Payouts) within an allowable limit of -2.5 percent to +2.5 percent of the previous day’s closing rate of the Nigerian foreign exchange market. The CBN has now, by the Allowable Limit Circular, directed that IMTOs can issue Payouts at the prevailing foreign exchange market rates.

Both the IMTO Guidelines and the Allowable Limit Circular set the tone for the operations of IMTOs going forward. In this alert, we consider the key changes introduced by the New IMTO Guidelines and its implications for entities operating in the financial services industry, particularly fintech companies.

 Scope of Targeted Users
The Old IMTO Guidelines restricted the scope of targeted users to individual customers and were on a person-to-person basis. The New IMTO Guidelines has now expanded the scope of targeted users to “person” to “person”, “business to person” and “business to business”.[1] The implication of this is that licenced IMTOs can now make Payouts to both individuals and business entities.

Increase in Application Fees
The application fee for licensing IMTOs under the Old IMTO Guidelines was NGN 500,000 but this has now been increased to NGN 10 million. This is separate from the minimum share capital of USD 1 million required for foreign IMTOs and the equivalent amount, for IMTOs licenced to operate in Nigeria[2].

Permissible Activities
The Old IMTO Guidelines permitted IMTOs to undertake allowable inbound and outbound international money transfer services. The New IMTO Guidelines now restricts IMTOs to only inbound activities.[3] This implies that IMTOs can no longer transfer funds directly to recipients outside Nigeria. They will have to use the banks (agents) to effectuate such outbound international money transfers.

On the mode of disbursement for inbound transfers, under the old IMTO regime, IMTOs could make Payouts in both foreign currency and Naira. The New IMTO Guidelines has changed this position, as IMTOs are only permitted to make Payouts in Naira, and not in foreign currency.

Additionally, IMTOs are not allowed to undertake any other business other than cross-border remittances.[4] Hence, companies with other financial products or service offerings (such as fintech companies) cannot apply for an IMTO license using the same entity; rather, they will have to procure an IMTO licence using a separate entity.

Banks and Financial Technology Companies in the Money Transfer Space
One key highlight of the New IMTO Guidelines is the prohibition of banks and financial technology companies (fintech companies) from operating international money transfer services. While fintech companies are prohibited from offering international money transfer services, banks are permitted to act as agents to IMTOs duly licensed by the CBN.[5]

In effect, fintech companies that require international money transfer services to effect relevant aspects of their operations may partner with licensed IMTOs, as appropriate.

Not all fintech companies will be affected by the IMTO Guidelines. As long as the payment system associated with the products or service offerings of a fintech company does not involve international money transfers, the IMTO Guidelines will not apply to its operations.

We note that the New IMTO Guidelines does not indicate how this restriction will apply to fintech companies that currently hold an IMTO licence.

Annual Renewal Obligations/Returns
IMTOs are now required to renew their IMTO licences at a fee of NGN 10 million on or before 31 January every year and failure to renew the licence within the first quarter of the year would prevent the IMTO from further transacting with its agent bank[6].

Additionally, IMTOs are required to file daily, weekly, and monthly returns to the CBN.

Record Keeping Obligations
The Old IMTO Guidelines required IMTOs to keep transaction information for a minimum period of 6 (Six) years after the transaction. The New IMTO Guidelines prescribes a minimum period of 5 (five) years.[7]

The recent policies on international money transfer services reflect the CBN’s concerted effort to advance policies that will engender the stability of the Naira and create a framework that guarantees that foreign exchange transfers to recipients in the diaspora pass through appropriate banking channels.

Should you have any questions regarding this alert, do not hesitate to contact Ajibola Asolo.


1. Tomilola Tobun – Senior Associate
2. Glory Akani – Associate